Massachusetts, home to America's best schools and best-educated workforce, has seen income inequality soar. Why? The poor are losing an academic arms race with the rich. Reuters "Education then, beyond all other devices of human origin, is a great equalizer of the conditions of men — the balance wheel of the social machinery." Horace Mann, pioneering American educator, 1848 "In America, education is still the great equalizer." Arne Duncan, U.S. Secretary of Education, 2011 BOSTON – When Puritan settlers established America's first public school here in 1635, they planted the seed of a national ideal: that education should serve as the country's "great equalizer." "THE UNEQUAL STATE OF AMERICA"A Reuters 3-part series. Americans came to believe over time that education could ensure that all children of any class had a shot at success. And if any state should be able to make that belief a reality, it was Massachusetts. The Bay State is home to America's oldest school, Boston Latin, and its oldest college, Harvard. It was the first state to appoint an education secretary, Horace Mann, who penned the "equalizer" motto in 1848. Today, Massachusetts has the country's greatest concentration of elite private colleges, and its students place first in nationwide Department of Education rankings. Yet over the past 20 years, America's best-educated state also has experienced the country's second-biggest increase in income inequality, according to a Reuters analysis of U.S. Census data. As the gap between rich and poor widens in the world's richest nation, America's best-educated state is among those leading the way. Between 1989 and 2011, the average income of the state's top fifth of households jumped 17 percent. The middle fifth's income dropped 2 percent, and the bottom fifth's fell 9 percent. Massachusetts now has one of the widest chasms between rich and poor in America: It is the seventh-most unequal of the 50 states, according to a Reuters ranking of income inequality. Two decades ago, it placed 23rd. If the great equalizer's ability to equalize America is dwindling, it's not because education is growing less important in the modern economy. Paradoxically, it's precisely because schooling is now even more important. One force behind rising inequality, in both America and other advanced economies, is well-known. The decline of manufacturing and the replacement of clerks and secretaries with software mean there are fewer high-paying jobs for low-skilled workers. The good jobs that do exist increasingly require higher education: Since the recession started in the U.S. in 2007, the number of jobs needing a college degree has risen by 2.2 million, according to a recent Georgetown University study. The number of jobs for mere high-school graduates fell by 5.8 million. FALLING BEHIND THE RICH Just to stay even, poorer Americans need to obtain better credentials. But that points to another rich-poor divide in the United States. Educators call it the scholastic "achievement gap." It has been around forever, but it's getting wider. Lower-class children are getting better educations than before. But richer kids are outpacing their gains, which in turn is stoking the widening income gap. Across the country, a Stanford University study found last year, the achievement gap between rich and poor students on standardized tests is 30 to 40 percent wider than it was a quarter-century ago. Because excellent students are more likely to grow rich, the authors argued, income inequality risks becoming more entrenched. "Now, we're in a situation where we need to educate everyone at the level of the elite in the past," said Paul Reville, Massachusetts secretary of education. "We don't have a system to do that." It's an academic arms race, and it can be seen in the sharply contrasting fortunes of Weston, a booming Boston suburb, and the blue-collar community of Gardner, where a 20-foot-tall chair sits on Elm Street as a monument to the town's past as a furniture-manufacturing hub. The percentage of Gardner children bound for four-year colleges has held steady at about half in the past decade, and median incomes have tumbled as furniture makers headed south or overseas. Gardner High School graduate Curtis Dorval dropped out of the University of Massachusetts this year after his father, a Walmart worker, ran short of money. He's working at a Walmart now, too, and then heading off to the military. In Weston, hedge-fund managers are tearing down modest homes to build mansions. Per-capita incomes have leaped 161 percent in the past two decades, and the high school is sending 96 percent of its graduates to universities. Tanner Skenderian, president of the class of 2012, is now at Harvard; in her graduation speech, she told her classmates to "reach for the moon." VICIOUS CYCLEThis correlation between educational attainment and financial fortune is clear statewide. In the bottom fifth of Massachusetts households, the average income dropped 9 percent in the past 20 years to $12,000. They fared worse despite a sizable gain in educational attainment: The share of people 25 and older in the group with a bachelor's degree rose to 18.5 percent from 11 percent. The same thing happened to the middle fifth. Their average income slipped 2 percent to $63,000. The share of adults with a bachelor's rose to 43 percent from 29 percent. But the top fifth saw their average income leap 17 percent, to $217,000, as their education levels soared far higher. Three-quarters had a bachelor's, up from half. Fully 50 percent had a post-graduate degree, up from a quarter. Some Massachusetts officials say they fear a vicious cycle is taking hold, in which income inequality and educational inequality feed off each other. Democrats and Republicans agree that the increased disparity is a threat to economic mobility in the state. But as in much of the rest of the United States, they disagree over what to do about it. Democrats argue the solution is more – and earlier – schooling. Republicans believe traditional public schools are part of the problem. The education gap is just one factor behind growing inequality. The U.S. economy has been so weak that large numbers of graduates are underemployed: In 2010, according to Andy Sum, director of the Center for Labor Market Studies at Northeastern University in Boston, only 59 percent of Massachusetts adults with a bachelor's degree were in jobs that actually required one. Long-term changes in marriage patterns matter, too, because they are stoking the educational-attainment gap that in turn feeds the income chasm. People are increasingly more likely to marry their educational equal, Sum's research finds, creating well-paid two-income couples at the top. At the bottom fifth, the number of single-parent families has risen 15 percent since 1990. Those parents have lower incomes and less time to devote to their children's schooling. In a pattern echoed nationwide, 70 percent of Massachusetts families with children in the bottom fifth are headed by a single parent – compared with 7 percent in the top fifth. "All the evidence shows that children born to two highly educated, high-income people tend to obtain the highest level of academic achievement," said Sum. "At the bottom, where the mom is not that well-educated and tends to have lower income, children tend to do worse." EDUCATED BUT MEDIOCREA brainier workforce alone isn't sufficient to drive growth, though. Even as education levels in the Bay State have risen lately, faster growth hasn't followed. Between 2000 and 2010, Sum found, Massachusetts ranked just 37th in job creation. In fact, none of the 10 states with the top students placed in the top 10 on payroll growth. "The best educated states were overwhelmingly mediocre in job creation," he wrote in a study last year. He urges states to complement education with such steps as tax credits, infrastructure spending and on-the-job training. Curtis Dorval, left, dropped out of college to enlist in the Air Force; he and his father, David, now work at a Walmart. REUTERS/Brian Snyder Seventy miles northwest of Boston, Gardner once touted itself as the "chair-making capital of the world." The factories employed thousands of workers who supported large families on single incomes. The first workplace time-recorder was invented here, too; as a result of its adoption, "punching the clock" became part of the vernacular. Today, the factories have gone south or closed. Gardner still calls itself the furniture capital of New England but because of its outlet stores, not its factories. The biggest employers are a hospital and a community college. Retail jobs at Walmart and other chains have replaced better-paying factory work. Between 1989 and 2009, the town's per capita income slipped 19 percent to $18,000. A town of some 20,000 people, Gardner has roughly twice the population of wealthy Weston, but spends just 60 percent as much on education. The town's high school has had six principals in the past eight years. Even kids who excel at Gardner High School increasingly face financial hurdles after they graduate, say teachers and students. Mayor Mark Hawke said cost routinely prices high-achieving students out of elite private colleges. "It happens every day," he said. David Dorval, 47, was laid off in 2009 after working at an area hospital registering patients for 16 years. Dorval, who has an associate's degree, struggled to find work, and he and his wife divorced. Today he takes home $1,000 a month at Walmart in Gardner and pays half of his earnings to his ex-wife in child support. He goes to his 79-year-old mother's house for lunch each day. "I don't feel like I am able to do what my parents were able to do," he said. "My parents were able to support eight kids." PRICED OUTHis son, Curtis Dorval, works at Walmart as well. When he was a senior at Gardner High School, Curtis was class president. He was accepted by Northeastern University, a private school in Boston. But Northeastern cost $50,000 a year, which Curtis, then 17, felt he couldn't afford. Instead, he enrolled last year at the state-run University of Massachusetts Amherst, studying mechanical engineering. With the help of a scholarship for graduating in the top quarter of his class, Curtis paid $10,200 a year. He got some help from his father, who had saved up $10,000 in stocks and bonds from his days in the hospital job. This summer, that money ran out and Curtis left UMass to enlist in the Air Force. He will serve as an airman – and hopes to use military benefits to pay for parttime university classes. "The main reason was I needed a way to pay for college," he said. David Dorval quickly used up his savings for Curtis's education. New England's excellent colleges are America's priciest – some 25 percent above the U.S. average. REUTERS/Brian Snyder That is the flip side of New England's excellent universities: They are the most expensive in the country, according to a study by the College Board. A four-year education at a public or private university costs nearly one-fourth more than the national average. Sticker shock is forcing those who do stay in college to pass up elite private schools for cheaper state ones. That's also happening in the middle-class town of Leominster, a former plastics-manufacturing center 15 miles east of Gardner. Among last year's top students was Eric Marcoux, co-leader of the robotics team and member of the National Honor Society. He was accepted to Worcester Polytechnic Institute, a top private engineering university. WPI offered him a $20,000 annual scholarship – but he and his family still faced taking on roughly $30,000 a year in debt. Marcoux chose the University of Massachusetts Lowell, where he'll have to borrow only half as much. "It was a lot of going back and forth," said Marcoux, whose dream is to work for Google. "It was a hard decision but I think it was the right one." Trading down can carry a stiff cost: A Harvard study published this year found that students who go to Massachusetts state colleges are less likely to graduate than those who attend Massachusetts private colleges. The state has tried to help poorer kids. In the early 1990s, Massachusetts sharply increased state funding of local elementary and secondary schools and mandated comprehensive testing. The overhaul was designed to improve student performance and eradicate the achievement gap. THE SAT GAPTwenty years later, Massachusetts spends $4.8 billion a year on its public schools, up 83 percent from 1990. Children from lower income families have improved their scores on tests, but their results still lag, as a look at results from the Scholastic Aptitude Tests makes clear. In the state's five wealthiest school districts, students had average scores ranging from 594 to 621 on the 800-point college-admissions test in 2009-2010. In the five poorest districts for which data are available, the SAT scores averaged from 403 to 469. Reville, the education secretary, wants a redoubled push on childhood education: The 1990s reforms were good but didn't go far enough. "There is no way for someone who is poorly educated to be self-sufficient," he said. "It's in our national interest to do something that we should have done morally anyway." What he proposes is sweeping change. Income depends on educational achievement, and the single best predictor of a child's likelihood of academic success remains in turn the socio-economic status of his or her mother, said Reville. The solution to erasing the achievement gap involves, in essence, providing low-income students with the advantages their wealthier peers enjoy: pre-school at the age of three, tutors, summer camps, and after-school activities like sports and music lessons. Schools could contract with outside organizations to provide those activities, or lengthen their school day or school year by one-third. Asked how much such an initiative might cost, Reville responded, "How much would it cost to give every child an upper-middle-class life?" Such talk makes Massachusetts Republicans blanch. They say they care about income disparities that harm people's ability to move up the income ladder. Americans are now less likely to move to a higher economic class in their lifetime than Western Europeans or Canadians, according to a number of recent studies. Republicans argue that the problem is not resources in the public schools: Massachusetts already ranks No. 8 in the amount of money states spend per student, according to the Census Bureau. CHOICE AND CHARTERS"What Reville is suggesting is wraparound social services," said Jim Stergios, executive director of the Pioneer Institute, a conservative think tank in Boston. "We think decentralized decision-making in the schools makes more sense." Instead of spending more, Stergios said, give parents greater choice over which schools their children attend. Expand the use of charter schools, financed by the public but managed independently. Make cities strictly follow the course of study set out by the state. Increase the accountability of teachers by linking pay to student test scores. "We haven't closed the (achievement) gap because the Massachusetts curriculum isn't being taught rigorously enough in the urban areas, principals don't have enough power and independence, and there's a cap on charter schools," said Stergios. "That's why we haven't seen the great equalizer working as it should." Adding to the complexity of addressing the income and educational gaps is a widening geographical divide in the state. In Massachusetts, some 230,000 people were unemployed in October, Conference Board data show, and roughly 140,000 unfilled jobs were advertised online. Skilled professions, including software engineers and web developers, topped the list. Nearly seven out of 10 vacancies were in the Boston area. Harvard economist Ed Glaeser calls this the new reality of a knowledge-based global economy. More than ever, innovation, growth and opportunity are clustered in large cities such as Boston. Let decaying factory towns become ghost towns. Instead of building better transportation links, Glaeser believes their inhabitants should be encouraged to move to the closest economic hub. "In 1940, you wanted to be in an area with resources for your mill," he said. "In 2012, you want to be in a cluster of smart people." CLASS CLUSTERSWeston, where Glaeser himself lives, is such a cluster. But it isn't for everyone. Its house prices and real estate taxes put it out of reach for most Massachusetts residents, which points up a conundrum. As those who can afford to do so head for the clusters, inequality grows. Across the state, communities are becoming more homogenous by income group, said Ben Forman, research director at think tank MassInc. "There are definitely more Westons now than there were a couple of decades ago," Forman said. "What the research shows is that more economic segregation leads to high-income children performing better and better and lower-income children falling behind." The Boston suburbs where Weston is located are home to the most-educated workforce in the nation's best-educated state, according to the Boston Federal Reserve. A Reuters analysis of Census and American Community Survey data found that two-thirds of working-age adults in Weston and surrounding towns had at least a bachelor's degree in 2010. That's more than double the national average of 28 percent. Just 23 percent of their peers in Gardner and its neighbors had a bachelor's or better. As earnings fell in Gardner they soared in Weston. In 1990, Weston residents made 3.5 times more than Gardnerites. By 2009, it was 12 to 1. On a summer Tuesday afternoon, a man was reading a copy of "Horseback Riding for Dummies" outside Bruegger's Bagels, the sole fast-food chain that Weston has allowed to open as it tries, with mixed success, to preserve its historic character. One hedge-fund manager built a 22-room mansion with a basketball court, pool and 10-car garage. Another tore down two homes to build a private equestrian center for his wife and daughter with an indoor riding ring. WESTON'S ADVANTAGESTown leaders say they are struggling to keep the town from becoming even wealthier. "We have three selectmen who are trying to find ways to diversify our population with affordable housing," said Michael Harrity, chairman of the board of selectmen. "It's difficult when lots are selling for $700,000 for teardowns." One area where development is warmly welcome is education. This fall, the town opened a new $13 million science wing for Weston High School that includes nine state-of-the art labs and a multimedia conference center. Weston High is one of the finest public schools in the country. In 2011, 96 percent of its graduates planned to go on to four-year degree programs. In Gardner, only about half did. Nationally, a 2011 University of Michigan study found that the gap in college-completion rates between rich and poor students has grown by about half since the late 1980s. Those differentials have a long-term impact. An American with a bachelor's degree earns on average about $1 million more over a lifetime than one with just some college, according to recent studies. Another advantage Weston kids have is their involved and demanding parents. Gardner High has no parent-teacher organization. In Weston, parents raised $300,000 last year for additional after-school activities in the public schools. Top scientists living in Weston help with school science fairs. Parental involvement is so intense that three parents sit on the interview panel for every prospective new teacher. Stay-at-home Weston mothers attend meetings of student-body leaders and help students organize events. They're known as "Grade Moms". 'VERY FORTUNATE' At Harvard Yard. A study ranked Massachusetts No. 1 in education, No. 37 in job creation. REUTERS/Brian Snyder Liz Hochberger, a recent president of the Weston Parent-Teacher Organization, said the town's excellent public schools had become a "self-fulfilling prophecy." Professors from Harvard and the Massachusetts Institute of Technology, along with the wealthy, move to Weston for its public schools, which further improves test scores and college acceptance rates. "Whenever someone is moving to this area and they research the schools," Hochberger said, "this is always on the list." Tanner Skenderian, president of this year's Weston High graduating class, joked in a speech about her town's hyper-competitive students. "Welcome to Weston, where third graders take AP Physics, middle-school students sleep for 42 minutes a night, and the most competitive race run by the 2012 boys state champion track team was the race to get the cookies in the cafeteria," she said. Competition in high school was fierce. In one advanced placement physics class, she said, six of the 12 students were the children of professors at MIT, America's premier science university. But Tanner thrived there. She also found school to be a source of support after her father died while she was in middle school. This fall, she headed to Harvard, after spending the summer interning at the governor's office. Given the job market, she said she may apply to business or law school after graduating. Weston, in short, gave her an education that raises her odds of joining her mother – who owns a marketing and event-planning company – at the top of America's economic ladder. "We're very fortunate that we're rather affluent," she said. "We have more opportunities, more technology, more classes and more teachers." Edited by Michael Williams and Janet Roberts See more at our Income Inequality homepage.
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